DEFINITION of 'Bank Insurance'

A guarantee by the Federal Deposit Insurance Corporation (FDIC) of deposits in a bank. Created in 1989, the Bank Insurance Fund is the federal fund used to insure bank deposits of national and state banks, that are members of the Federal Reserve System. Bank Insurance helps protect individuals who deposit their savings in banks, against commercial bank insolvency. Each depositor is insured to at least $250,000 per bank.

BREAKING DOWN 'Bank Insurance'

The FDIC, an independent U.S. government corporation, was initiated under the Glass-Steagall Act of 1933. Its purpose was to insure bank deposits against loss and to regulate banking practices. The collapse of a great majority of banks in the United States, during the Great Depression, prompted the creation of the FDIC.

RELATED TERMS
  1. FDIC Insured Account

    An account that meets the requirements to be covered or insured ...
  2. Federal Deposit Insurance Corporation ...

    The U.S. corporation insuring deposits in the U.S. against bank ...
  3. Risk-Based Deposit Insurance

    Deposit insurance with premiums that reflect how prudently banks ...
  4. FDIC Problem Bank List

    A list of commercial banks in the U.S. that are considered to ...
  5. Deposit Insurance Fund - DIF

    A fund that is devoted to insuring the deposits of individuals ...
  6. Bank

    A financial institution licensed as a receiver of deposits. There ...
Related Articles
  1. Insurance

    Federal Deposit Insurance Corporation (FDIC)

    The Federal Deposit Insurance Corporation (FDIC) insures deposits in banks and thrift institutions.
  2. Insurance

    How the Federal Deposit Insurance Corporation (FDIC) Works

    Learn more about the Federal Deposit Insurance Corporation (FDIC) and what happens to your deposits over $250,000 if a member bank fails.
  3. Investing

    Who Backs Up The FDIC?

    The FDIC insures depositors against loss, but what happens if it runs out of money?
  4. Personal Finance

    Are Your Bank Deposits Insured?

    Learn how the FDIC is helping to keep your money in your pockets.
  5. Investing

    Introduction To The Chinese Banking System

    As China steps into a greater role in the global economic system, their banking system continues to evolve.
  6. Investing

    FDIC Sues Bank of America Over Deposit Insurance

    In a lawsuit filed Monday, the FDIC says Bank of America owes at least $542 million for deposit insurance.
  7. Investing

    What is a Bank?

    A bank is a financial institution licensed to receive deposits or issue new securities to the public.
  8. Investing

    Certificates Of Deposit

    Safety is a hallmark of the traditional certificate of deposit (CD) sold by a bank or credit union.
  9. Financial Advisor

    Why Banks Don't Need Your Money to Make Loans

    Contrary to the story told in most economics textbooks, banks don't need your money to make loans, but they do want it to make those loans more profitable.
RELATED FAQS
  1. Why are CDs (Certificate of Deposit) FDIC-insured?

    Find out why certificate of deposits (CDs) are insured by the FDIC and what the deposit requirements are for receiving insurance ... Read Answer >>
  2. Are variable annuities FDIC insured?

    Understand how variable annuities are not insured by the FDIC but realize that most states have guarantee funds in place ... Read Answer >>
  3. Does the FDIC cover business accounts?

    Learn what types of business accounts are insured by the FDIC, and find out how much of the deposits made by a business are ... Read Answer >>
Hot Definitions
  1. Net Profit Margin

    Net Margin is the ratio of net profits to revenues for a company or business segment - typically expressed as a percentage ...
  2. Gross Margin

    A company's total sales revenue minus its cost of goods sold, divided by the total sales revenue, expressed as a percentage. ...
  3. Current Ratio

    The current ratio is a liquidity ratio measuring a company's ability to pay short-term and long-term obligations, also known ...
  4. SEC Form 13F

    A filing with the Securities and Exchange Commission (SEC), also known as the Information Required of Institutional Investment ...
  5. Quantitative Easing

    An unconventional monetary policy in which a central bank purchases private sector financial assets in order to lower interest ...
  6. Risk Averse

    A description of an investor who, when faced with two investments with a similar expected return (but different risks), will ...
Trading Center